S. Korea pitches capital markets to European investors in Paris

South Korea's government took its investment pitch to Europe, presenting the country's economic fundamentals and capital market reforms to major institutional investors in Paris.

Vice Minister of Finance and Economy Heo Jang hosted an investor briefing Thursday at South Korea's OECD Mission in Paris, the Ministry of Finance and Economy said.

The event drew senior executives from Amundi, Europe's largest asset manager, as well as French investment banks and asset managers including BNP Paribas, Crédit Agricole, Natixis and Société Générale.

Heo said South Korea is strengthening its investment appeal on the back of solid economic fundamentals and a pivotal role in global AI supply chains.

He said exports from January through May rose more than 40 percent year-on-year to roughly $390 billion, driven by a semiconductor supercycle, and that first-quarter GDP growth of 1.7 percent quarter-on-quarter was the highest among OECD member countries. Gross domestic income also rose 7.5 percent quarter-on-quarter, pointing to sustained growth momentum, he added.

Heo also highlighted the external sector. South Korea's current account surplus reached $85 billion in the first quarter, ranking fifth in the world and up roughly 220 percent from the same period last year. He said that if the trend continues, this year's surplus could surpass last year's record $123 billion.

Heo said the government is supporting strategic industries including AI, semiconductors and advanced manufacturing while working to revive domestic demand and stimulate private investment. Capital market modernization efforts are also underway through improved corporate governance, stronger shareholder protections and a separate taxation regime for dividend income, he added.

He said capital market reforms are bearing fruit: the Kospi has more than tripled since the new administration took office, and South Korea's market capitalization has climbed to rank sixth or seventh in the world. Net foreign inflows into government bonds following South Korea's inclusion in the World Government Bond Index reached $18.7 billion as of Thursday, he added.

Investors expressed interest in the Korean stock market's strong recent gains and competitive standing.

Heo said capital market reforms — including amendments to the Commercial Act to improve corporate governance — combined with the semiconductor and AI supercycle are creating powerful conditions for a shift to a "Korea premium" in the country's equity markets.

He went on to say the government is also working to improve market accessibility by aligning the foreign exchange and capital market regime and infrastructure with global standards.

Questions also arose about foreign exchange market liberalization. Heo said 80 foreign financial institutions are now registered as registered foreign institutions and participating in the domestic forex market, with after-hours trading volumes gradually rising — signs that the market opening is producing results.

He said the government will press ahead with plans to operate the foreign exchange market around the clock and build an offshore won settlement system, making it easier for global investors to trade the won without restrictions on time or location.

Heo said South Korea successfully issued $3 billion in foreign currency stabilization bonds in February at a record-low spread, out of this year's $5 billion issuance limit. The timing and currency composition of the remaining $2 billion have yet to be decided, he said, but will be determined after a comprehensive review of international financial market conditions and funding needs.

The prolonged conflict in the Middle East and high oil prices were also a focus of discussion. Heo said the government is keeping prices and oil costs stable through supply management and proactive crude procurement, and is coordinating with major countries to improve supply chains, diversify crude import sources and redesign critical mineral supply chains.

Investors at the briefing spoke highly of South Korea's economic performance and the government's commitment to market reform, the Ministry of Finance and Economy said.

Participants noted that South Korea is already recognized among global investors as a "core market" on par with European and US markets, and that major European media outlets have recently been spotlighting the Korean stock market's success story.

They said they would continue to follow South Korea closely and deepen cooperation, citing strong confidence in the government's consistent reform agenda.